Chapter 1: Overview of Marketing
What is Marketing?
Marketing: a set of business practices designed to plan for and present an organization’s
products/services in ways that build effective customer relationships.
Marketing plan: written document composed of an analysis of the current marketing
situation, opportunities, and threats for the firm, marketing objectives and strategy
specified in terms of the four Ps, action programs, and projected or pro forma income
(and other financial) statements.
Marketing is about Satisfying Customer Needs and Wants
Need: a person feeling deprived of basic necessities of life, such as food, clothing,
shelter, or safety.
Want: the particular way in which the person chooses his/her life need, which is
shaped by the person’s knowledge, culture and personality.
Market: the group of people who need or want a company’s products/services
and have the ability and willingness to buy them.
Target market: the customer segment or group whom the firm is interested in
selling its product and services.
Marketing entails Value Exchange
Exchange: the trade of things of value between the buyer and the seller so that
each is better off as a result.
Marketing requires Product, Price, Place and Promotion Decisions Marketing mix (the four Ps): product, price, place and promotion – the
controllable set of activities that a firm uses to respond to the wants of its target
markets.
Product: Creating Value
Goods: items that can be physically touched.
Services: intangible customer benefits that are produced by people or machines
and cannot be separated from the producer.
Ideas: include thoughts, opinions, philosophies, and intellectual concepts.
Price: Transacting Value
Price: the overall sacrifice a consumer is willing to make – money, time, energy –
to acquire a specific product/service.
Place: Delivering Value
Describes all the activities necessary to get the product from the
manufacturer/producer to the right customer when that customer wants it.
Promotion: Communicating Value
Communication by a marketer that informs, persuades, and reminds potential
buyers about a product/service to influence their opinions or elicit a response.
Marketing can be performed by Individuals and Organizations
Businesstoconsumer: the process in which businesses sell to consumers.
Businesstobusiness: the process of selling product/services from one business
to another.
Consumertoconsumers: the process in which consumers sell to other
consumers.
Social media: the use of Internet tools to easily and quickly create and share content to
foster dialogue, social relationships, and personal identities.
Marketing occurs in Many Settings Hospitals, theatres, charities, museums, religious institutions, politicians, and even
governments rely on marketing to communicate their message.
Marketing helps Create Value
Product orientation: focus on developing and distributing innovative products
with little concern about whether the products best satisfy customers’ needs.
Sales orientation: view marketing as a selling function where companies try to
sell as many products as possible rather than focus on what they want.
Market orientation: focusing on what the consumers want and need before
designing, making or attempting to sell their products/services.
Valuebased orientation: value reflects the relationship of benefits to costs, or
what the consumer gets for what they give.
What is ValueBased Marketing?
Valuebased marketing: focuses on providing customers with benefits that far exceed
the cost (money, time, effort) of acquiring and using a product/service while providing a
reasonable return to the firm.
Transactional orientation: regards the buyerseller relationship as a series of individual
transaction; little importance of what happened before or after.
Relationship orientation: method of building a relationship with customers based on the
philosophy that buyers and sellers should develop a longterm relationship.
Customer relationship management (CRM): business philosophy and set of strategies,
programs, and systems that focus on identifying and building loyalty among the firm’s
most valued customers.
Why is Marketing Important?
Expand Global Presence
Pervasive Across the Organization
Pervasive Across Supply Chain (Supply chain: the group of firms and set of
techniques and approaches firms use to make and deliver a given set of
goods/services)
Makes Life Easier
Provide Career Opportunities
Enriches Society
Can be Entrepreneurial
Chapter 2: Developing a Marketing Plan and Marketing Strategies Levels of Strategic Planning in Corporations
Marketing planning process: set of steps a marketer goes through to develop a
marketing plan.
The Marketing Plan
Planning phase: marketing executives and top managers define the mission and
objectives of the business, and evaluate the situation by assessing how various players, in
and out, affect the potential success of business.
Implementation phase: marketing managers identify and evaluate different
opportunities by engaging in a process known as segmentation, targeting and positioning;
develop and implement the marketing mix by using the four Ps.
Control Phase: part of the strategic marketing planning process when managers evaluate
the performance of the marketing strategy and take any necessary action.
Step 1: Define the Business Mission and Objectives Mission statement: a broad description of a firm’s objectives and the scope of
activities it plans to undertake; attempts to answer two main questions; what type
of business, what does it need to accomplish goals and objectives?
Step 2: Conduct a Situation Analysis
Situation analysis: uses a SWOT analysis that assesses both the internal
environment: its Strengths and Weaknesses and the external environment: its
Opportunities and Threats.
Includes an examination of market trends, customer analysis and competitive
analysis.
Assess opportunities and uncertainties of the market place in Cultural,
Demographic, Social, Technological, Economic, and Political forces (CDSTEP).
Step 3: Identify and Evaluate Opportunities using STP
Segmentation, Targeting, Positioning (STP): the processes used to identify and
evaluate opportunities for increasing sales and profits.
Market segment: a group of consumers who respond similarly to a firm’s
marketing efforts.
Market segmentation: the process of dividing the market into distinct groups of
customers where each individual group has similar needs, wants or characteristics.
Target marketing/targeting: the process of evaluating the attractiveness of
various segments and then deciding which to pursue as a market.
Market positioning: the process of defining the marketing mix variables so that
target customers have a clear, distinct, desirable understanding of what the
product does or represents in comparison to competing products.
Marketing objectives: include market share, revenues and profitability targets,
unit sales volume, and brand awareness.
Step 4: Implement Marketing Mix and Allocate Resources
Product and Value Creation: attempt to develop products and services that
customers perceive as valuable enough to buy.
Price and Value for Money: provide a product/service/combination and in return
receive money.
Place and Value Delivery: make the product/service readily accessible when and
where the customer wants it. Promotion and Value Communication: communicate the value of their offering, or
the value proposition to the customers through a variety of media.
Step 5: Evaluate Performance by Using Marketing Metrics
Metrics: measuring system that quantifies a trend, dynamic or characteristic.
Performance Objectives and Metrics: evaluate performance overtime or to
competition; using sales and profits or products/services as portfolio.
Financial Performance Metrics: assess revenues, sales and profits.
Social Responsibility Performance Metrics: corporate social responsibility (CSR);
impact on the environment, ability to diversify workforce, energy conservation
initiatives, policies on protecting human rights of employees and suppliers.
Strategic business unit (SBU): division of the company that can be managed somewhat
independently from other divisions since it markets a specific set of products to a clearly
defines group of customers.
Product line: group of products that consumers may use together or perceive as similar
in some way.
Relative market share: measure of the product’s strength in a particular market, defined
as the sales as the focal product divided by the sales achieved by the largest firm in the
industry.
Market growth rate: annual rate of growth of the specific market in which the product
competes.
Growth Strategies
Market Penetration strategy: growth strategy that employs the existing
marketing mix and focuses the firm’s efforts on existing customers.
Market Development strategy: growth strategy that employs the existing
marketing offering to reach new market segments, whether domestic or
international or segments not served by firm. Product Development strategy: growth strategy that offers a new
product/services to a firm’s current target market.
Diversification strategy: growth strategy that introduces a new product/service
to a market segment that it does not currently serve.
Downsizing: exiting markets, reducing product portfolios, or closing certain
businesses or store or plant locations.
Marketing Strategy and Sustainable Competitive Advantage
Marketing strategy: identifies target markets, a related marketing mix – the four Ps, and
the bases upon the plans to build a sustainable competitive advantage.
Sustainable competitive advantage: something to do persistently better than its
competitors that is not easily copied and can be maintained over a long period of time.
Building a Sustainable Competitive Advantage
Customer excellence: involves a focus on retaining loyal customers and excellent
customer service.
Operational excellence: involves a focus on efficient operations and excellent supply
chain management.
Product excellence: involves a focus on achievement highquality products and effective
branding and positioning.
Locational excellence: involves a focus on a good physical location and Internet
presence.
Chapter 3: Analyzing the Marketing Environment
Understanding the Marketing Environment Microenvironmental Factors
Company Capabilities
Competition (competitive intelligence (CI): collect and synthesize information
about their position with respect to their rivals; enables companies to anticipate
changes in the marketplace)
Corporate Partners
Macroenvironmental Factors (CDSTEP)
Culture: shared meanings, beliefs, morals, values, and customs of a group of
people. Country’s culture: artifacts, behavior, dress, symbols, physical settings,
ceremonies, language differences, colours and tastes, and food preferences.
Demographics: characteristics of human populations and segments; those used
More
Less
